Much to the delight of its shareholders, the Treasury Wine Estates Ltd (ASX: TWE) share price continued it meteoric rise on Tuesday.
In fact, the global wine company's shares hit a 52-week high of $16.43 at one stage. This stretched its year-to-date return to approximately 54%.
Why are its shares at a new high?
Investors appear to believe that Treasury Wine Estates will receive a boost to its earnings growth thanks to the proposed tax reform in the United States.
Approximately 42% of its revenue is generated in the Americas, with the majority of this coming from the U.S. market.
According to a note out of Citi, its analysts estimate that the tax reform could add an additional 8% to its profit growth should it go ahead as planned.
However, this hasn't been enough to warrant a change in sentiment for Citi. The broker remains one of the more bearish brokers out there and has a sell rating and $10.90 price target on Treasury Wine Estates' shares.
The broker believes that its shares are expensive given its current growth profile.
CSL Limited (ASX: CSL) and ResMed Inc. (CHESS) (ASX: RMD) are two other companies which could benefit greatly from U.S. tax reform.
